The stock of GAIL India, the largest gas transmission and marketing company in India, could pick up
The stock of GAIL India, the largest gas transmission and marketing company in India, could pick up steam in the short-term. Investors can buy this stock from a short-term trading perspective. The stock has been on a long-term downtrend since peaking out from its January 2011 peak of Rs 535 levels. However, it found support at its significant long-term base at around Rs 284 in late June and started to move sideways. We notice formation of a double bottom, a bullish reversal pattern in the daily chart, spanning between early June and late September with neckline at Rs 332.
On September 20, the stock decisively breached this neckline by gaining 3.4 per cent accompanied by good volume. Later on the stock gave away its gains forming a flag pattern. The daily relative strength index is featuring in the bullish zone and weekly RSI is on the brink of entering the bullish zone from the neutral region. The stock is hovering well above its 50- and 200-day moving averages. Both daily and weekly price rate of change indicators are featuring in the positive terrain implying buying interest. We are bullish on the stock from a short-term perspective. We expect its rally to extend and reach our price target of Rs 350 or Rs 357 in the ensuing trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 329.5 level.